Sunday, July 25

Animal Farm

One of India's more watched news channels and its leading English daily recently ran an expose on the pitiful state of our food distribution system. Given the sheer emotive value of rotting grain in a nation home to the world's largest concentration of the hungry, yet with superpower ambitions, public interest was bound to get fired up. Again, the backdrop of runaway food inflation (that has under its spell more than a trifling percentage of our Great Unwashed) provided to the outrage a tinge of rare immediacy. A call to action, so to speak, seemed incipient in the wave of national indignation.

Yet, it remains a moot question as to whether this will lead to tangible change. While the media may have chanced upon its grandstand newsworthiness now, the issue has been hanging fire for ages. My personal recall itself is from two decades ago - copious if not compelling lamentations on 'distribution losses', penned in the pursuit of an Economics degree - and the problem was not of recent vintage even then! Indeed similar protestations brought academic glory to many (not me!) over the years, with pithy math of mouths fed if gaps plugged etc. Yet to not much avail, as the sordid visuals from TV testify. For one, the agricultural supply chain has been hostage to political ambivalence for too long. Such has been the potency of notoriously enmeshed vested interests in its every leg, that all other actors need to be content with status-quoist survival play, mostly far too cynical to challenge it. A quick sample is illustrative of the extent of the rot in the entire ecosystem:

Starting at the farm-gate, the so-called farmer lobby (read large agriculturists) cannot think beyond input subsidy retention and diesel price control. Interest in output is limited to pushing periodic MSP increases, with populist governments only too willing to oblige. Their small-marginal brethren are too fractured to wield any real political influence, clear from the typically lackadaisical, stopgap response to farmer suicide. Lack of organized credit in any case confines their choices - a fledgling microfinance revolution is still some time away. (This is not to undermine the fact that better contextual appreciation and economic timing helps sustain local moneylender-cum-intermediary strangleholds.) In this extant reality of stagnant productivity, the otherwise laudable NREGA and mostly reprehensible Maoist violence – both add fresh undercurrents. It remains to be seen how these play out, but (at least for now) they have bred more questions than solutions.

Moving ahead in the chain, the picture alters only slightly. Higher investment continues to be a crying need in storage and distribution of agricultural produce. Public sector agencies hold the key, but gunnies full of foodgrain don’t have a vote, and tackling post harvest waste remains low in their priorities. Other logistics players, only occasionally different from middlemen, have little motivation to drive efficiency, with infrastructure (and corruption) squeeze on margins, unless to profit from (artificially induced) supply imbalances. Lastly, wholesale through last-mile retail suffer from scale, subject to high rent, rising operating expenses and limited organized investment, disadvantaging honest trade.

Fact remains that our nation also drove a Green Revolution. The erstwhile stage was one of stronger political will, public memory fresh from ignominious PL 480 capitulations. In consequently sympathetic ears, AIR propagated research science prescriptions and rural India took to HYV seeds, fertilizer and irrigation in little time. (Incidentally, the most common critique of the Revolution's centres around land degradation, showing little appreciation of R&D’s evolutionary nature - science is a process of constant churn, not one-time infusion. Critics likewise gloss over the lopsided nature of fertilizer subsidy etc.)

In short, we must lean on science again. Be it input optimization, cultivation and processing practices, storage or transit efficiency - each can benefit from the strides the scientific-industrial world has taken over the years. (Robust risk modelling too can help drive deeper microcredit penetration but that science, alas, draws much derision in a post-Lehman world!) And our IT prowess can be brought to bear on information gaps that mess up cycle time, cost and pricing across the value chain.

It would, of course, be naive to think one can solve it without social science. And no, this is not a call to the political class to miraculously conjure the will to lead the charge. Shorn of direct electoral gain, political commitment levels seldom multiply manifold - if it has not happened in years, a blog post or television theatrics won’t. (Our beloved Agriculture Minister is anyways planning to focus on his new ICC Chair, when not engaged in periodic one-upmanship exercises with his professed ally). This is merely to request for not wilfully muddying the waters. We cannot afford to continue ludicrous supply-pricing games; with ill-advised and badly-executed (if not dubiously intended) market interventions missing economic sense.

Hypercritical of politics after a fashion? No. We should recognize the math by which 58 million tonnes of stock accumulates, double of actual need, Or how over a million tonnes were lost to storage and transit in the last four years while at least as many parts of the country reported starvation deaths. (Yes, we did give folks with BPL cards TV sets in some recent state elections. Good - they can now watch the tragicomedy play out live.) So if our political master can just about manage to keep their gaming instincts under control, this can get off the ground well enough. And if we are really, truly lucky, perhaps they can think visionary - and allow full mobility and free markets in the sector. Food Security would then move from policy shibboleth to proud reality.

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